In the world of banking, staying updated with regulatory changes is crucial. Recently, six prominent Indian banks, including HDFC Bank, Axis Bank, and Yes Bank, have sought extra time from the Reserve Bank of India (RBI) to comply with new payment processing rules. These changes involve the Bharat Bill Payment System (BBPS), a centralised system aimed at streamlining bill payments.
(Background on BBPS: The Bharat Bill Payment System (BBPS) was introduced by the National Payments Corporation of India (NPCI) to simplify and unify all bill payments across the country. Launched in 2013, the BBPS aims to provide an accessible platform for customers to pay various bills, from utilities to education fees, through a single window. It is designed to improve the efficiency and security of bill payments, making it easier for consumers and businesses alike.)
As of July 5, six bank, namely HDFC Bank, Axis Bank, IDFC Bank, Indian Bank, Indian Overseas Bank, and Yes Bank, have not yet activated their BBPS for processing credit card payments through third-party apps like Cred, PhonePe, and Paytm. This delay comes despite the RBI’s directive that all credit card payments should be processed via BBPS starting from June 30. The banks are requesting a one-month extension to fully implement the necessary systems.
According to industry insiders, the banks have been working diligently to set up their systems to comply with the BBPS requirements. However, the process is complex and time-consuming, leading to the current delay. The Indian Banks’ Association (IBA) is in discussions with the RBI to seek a temporary relaxation to ensure a smooth transition.
In the meantime, third-party payment apps like Cred and PhonePe are using alternative methods such as Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), and Unified Payments Interface (UPI) to process credit card bill payments for banks that have not yet complied with the BBPS directive.